Soilbuild Business Space REIT plans to make a maiden foray into Australia and acquire two properties for a total consideration, including other costs, of A$120.96 million, the REIT’s manager said on Friday.
The first property is a centrally located office at Australia Place, 14 Mort Street, Canberra City, ACT, in New South Wales, for A$55.00 million, which will be acquired from 14 Mort Street Property CT as trustee for Ascot Capital 14 Mort Street Property Trust, it said.
The second property is a poultry processing plant at 1118, 1120, 1122-1136 & 1138-1146 Port Wakefield Road, Burton SA, for A$61.25 million, which will be acquired from Burton CT as trustee for the Ascot Capital Burton Property Trust, it said.
It used a conversion rate of one Singapore dollar to one Australian dollar, it said.
In the first year, the proposed acquisitions are expected to generate a net property income yield of around 6.42 percent and 6.17 percent, pre and post transactions costs, respectively, the filing said.
The acquisitions will be funded with a combination of Australian dollar loans and the issuance of S$60 million or S$100 million perpetual securities by Soilbuild REIT, it said.
“We are excited by this opportunity to gain entry into the Australia market with an acquisition of a portfolio of long tenure assets on leaseback arrangements with financially strong tenants,” Roy Teo, CEO of Soilbuild REIT’s manager, said in the statement.
“The proposed acquisitions are expected to be yield-accretive based on our intended funding scenario, enhance the quality of our portfolio and provide geographical diversification,” he added.
The properties will be held in a previously established, wholly owned managed investment trust called Soilbuild Australia Trust, it said.
The proposed acquisitions are expected to be completed in the third quarter of this year, it said.
After the deals are completed, Soilbuild REIT will own 11 properties in Singapore and two in Australia, with its portfolio valuation expected to rise to S$1.23 billion from S$1.11 billion, the filing said.